Working natural gas stocks in the USA’s Pacific region totaled 73 billion cubic feet (Bcf) as of March 31, the Energy Information Administration (EIA) reported Thursday, saying this is the lowest on record as unusually cold temperatures drove consumption.
But as the country’s heating season that started November 2022 ended last month, Pacific working natural gas stocks rose to 90 Bcf as of the end of last week, according to a separate EIA report also published Thursday.
“Reduced natural gas stocks contributed to higher wholesale natural gas and electricity prices on the West Coast”, it said in its analysis for the Pacific.
“Working gas stocks totaled 250 Bcf at the outset of the 2022–23 heating season in the Pacific region, down 10% from the five-year average and under the 300 Bcf threshold common before the 2017–18 heating season”, the EIA said.
“A below-average 2022 refill season increased the deficit to the five year-average in the region. Net injections in the region last summer totaled only 85 Bcf, down about 21% from the five-year average”.
It also cited operational changes for the decrease in stocks, particularly Pacific Gas & Electric Co’s reclassification of 51 Bcf of working natural gas to base gas, noting the utility is the main natural gas retailer in Northern California. This meant a permanent reduction of 51 Bcf, the agency said.
It added: “The largest storage field in the region, Southern California Gas Company’s (SoCalGas) Aliso Canyon also had its effective working gas capacity reduced following a leak at the facility in 2015. Before the accident, SoCalGas’s maximum working gas capacity was 136 Bcf”.
Besides lower storage takein rates, withdrawals helped drag down working natural gas stocks in the Pacific to the lowest level since EIA started tracking in 2010.
It noted “increased consumption of natural gas in the residential and commercial sectors due to colder-than-normal temperatures in the Pacific region”.
“Considerably colder-than-normal temperatures prevailed throughout most of the 2022–23 heating season in the Pacific region. Cumulative heating degree days during the heating season were the highest since the 1984–85 heating season”, the EIA said, analyzing data from the National Oceanic and Atmospheric Administration. “These colder-than-normal temperatures increased heating demand for natural gas and resulted in larger withdrawals from natural gas storage”.
The low temperatures increased residential and commercial intake in the region by 15.2 percent or four billion cubic feet a day compared to the five-year average, while that of the electric power sector surged 25.2 percent against the five-year average, the EIA said citing Pointlogic data.
Electric generators also turned to natural gas to offset weaker hydroelectric generation, which fell 16 percent in the past winter against the prior winter, the EIA said.
Withdrawals in the region during the heating season were the highest since the 2013-14 season.
“These increases in natural gas consumption were partly offset by net inflows into the region from Canada and the Mountain region, and withdrawals from natural gas storage balanced the rest of this increased demand for natural gas”, the EIA said.
Though the EIA did not deem the record cold in the Pacific to have resulted in historically high withdrawals, it warned “opening working natural gas levels at the beginning of the heating season often have a significant impact on the magnitude of withdrawals from working gas during the following season because larger available inventories can mean larger withdrawals”.
Working natural gas stocks in the continental USA excluding Alaska totaled 2.009 trillion cubic feet as of April 21, a 35.4 percent increase from the same period last year, according to the EIA’s latest “Weekly Natural Gas Storage Report”. The Pacific was the only region to have recorded a year-on-year decrease, by 47.4 percent.
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